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This report by David Sanger of the NYT shows how the Russia sanctions that president Putin hoped to remove are likely to remain in place and somewhat expanded. Russia's economy has seen slow growth of 1% as a result of a fall in foreign investment. This is likely to continue, says Sanger. American investment in privatization will be restricted to not more than $10 million, and the investments in Nord Stream pipeline are affected. Russia needs foreign investment in its economy, and this is affected. Sanger points out that even if president Trump and Secretary of State Tillerson preferred the option of having presidential authority to lift sanctions to improve relations with Russia, this now runs into Congressional opposition. At the Aspen Security Forum in mid July, Dan Coats and Mike Pompeo, senior intelligence officials in the administration, said that there was an effort to influence the U.S. election. The problems started with the opposition movement in Ukraine, leading to the collapse of the government in 2014. Before this Russia- U.S. relations followed the trajectory set early in the Putin first  and second term of improving the economy by forging better relations with the EU and the U.S. This resulted in a stronger economy and more foreign investment. Things deteriorated after the Ukraine issue came into prominence. For the U.S., the EU and Russia, an inability to come to a better understanding and resolve differences on Ukraine has created a downward trajectory, that has not benefited any of the countries involved.   ...

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Bloomberg Business Week's Matthew Winkler interviews Greece's prime minister George Papandreou.

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Biden has put forward a new initiative to strengthen democracy by getting increased commitments to key features for democratic processes in the world. The idea is not to limit partnerships with other countries says Anthony Blinken, Mr. Biden's main adviser and secretary of state. This means India a key partner in both democracy and the Indo-Pacific can for defending its thousands of miles of border in the high Himalayas with enroachment of China into border areas such as Tibet, maintain its good legacy relationships with Russia as happened in last weeks Modi-Putin meeting.  The idea says Blinken is- "The US does not want to limit your partnerships with other countries. We want to make your partnerships with us even stronger." This means the Philippines, Indonesia, Malaysia, Sri Lanka, can maintain economic and development related ties with China which contribute to their economy, and build stronger relationships of culture and democratic processes with the US, India, European Union and Japan. For this reason the White House has emphasized that this is not about the US giving stamp of approval or disapproval of which country is a democracy and which is not. Too much of that happened under previous governments including Reagan, Carter, Bush, Obama.  The situation of Turkey relates to independence of judiciary and the unwillingness to take another look at problems. There is also the issue of technology is to be used so that citizens are protected from undue surveillance. Mistakes can be made but judiciary acts as an independent branch under the arrangements of checks and balances in American, British and now European frameworks of democracy built over centuries of struggle between monarchies and the people dating back to the Magna Carta in Britain. Neglect of workers and families also is an issue for democracies as for instance the effort now taking place in Germany under Scholz to "respect" workers and families. Lack of this led to the movements in US and European democracies giving room to vent that could ultimately lead to subverting democracies in the homeplace of democracies in the US or Britain. Why such a large gathering of 100 countries? Biden understands that the processes of democracy are always being improved and are a work for each new generation. For this reason there is no perfect scorecard- an ever renewing effort to make the process work in the best interests of the people of the country one generation at a time, to improve the quality of life and do this by preserving the right of peoples to choose their governments.  Why exclude China and Russia, till recently China had a consultative arrangement to run the country and Russia has elections? On this question the response of the Biden administration is that countries commit to the process and back initiatives to "counter authoritarianism. combat corruption, and promote respect for human rights."   Pakistan because it struggles with a long legacy of shortfall in the area of education after the collapse of Mughal rule that was seen under the British, and the general poverty of the Indian subcontinent that is striving to preserve the practice of elections, judiciary, and other democratic processes that were introduced in the Punjab and Sind provinces, and elsewhere since 1900. This is true for much of Africa, and also in parts of India, where aspirations of the people are for democratic process but faced with difficulties, corruption and poverty. In India the efforts of Naoroji, Gokhale, Gandhi, Nehru and Rajagopachari, Govind Pant, almost all leaders of the period since the 1850's, and able well meaning administrators since Lord Mayo in 1868 were to let democratic processes gradually find deep roots. Biden see aspirational in the face of difficulties as acceptable, even truly remarkable, with a willingness to learn from other countries to strengthen its own processes for democracy. It is no longer an Anglo-Saxon model alone as Germany and Europe are part of this process to be renewed by each generation. So are India and Japan. India after a century of elections since 1900 gradually expanding voters from one million to 5 million in the 1930's and to 900 million in 2019, with independent judiciary in a system of checks and balances as in the US.    ...

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Germany will give 16 state authorites 2.5 billion euros to support a6 euro monthly rail pass that can take you to anywhere in Germany for a month. About 7 million tickets have already been sold. Deutsche Bahn is operating at 80% of capacity at this time. Inflation is up 7.9% in Germany last month and this is a result of the war in Ukraine.

In other aid the German government has given-

Cutting the fuel tax by 30 cents a litre for gasoline to keep prices below 2 euros.

Those in work will get a one time 300 euros energy rebate for energy costs in autumn.

A 100 euros child benefit bonus per child.

People on other welfare benefits will also receive 100 euros.

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The Economist points out that the last thing President Obama needs - when he has serious domestic and foreign policy goals- is another Vietnam. Just as Bush's presidency was seriously affected by Iraq, Obama's presidency it says would be seriously affected by Afghanistan. And the Economist emphasizes as General Chrystal's chief conclusion: "an insurgency cannot be defeated by aforeign army alone." It points to General Chrystal's view that success means winning the support of the people, and the loss of faith in the government of Karzai. Obama and Biden will have noted this as they have growing doubts of their own about the widespread fraud seen in the Afghan election. Ground reports from Afghanistan support this assessment about acomplete loss of support for the Karzai government. See Intelilinks.

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Anne Applebaum describes comments of European diplomats she talked to who were strongly critical of British prime minister Cameron's efforts to win special protections for London's financial district, the City. They described this as petty, especially when the European negotiators were working to save the Euro currency. Sarkozy said recently that the British hate the euro, and have done little to help, and should shut up. And that is the sense today in European capitals even as Conservatives in Britain applaud Cameron's move. The result is to isolate Britain from the rest of Europe, even as Britain will be put in a position to having to play by rules set by the other 26 countries in the European Union, who are its main trading partner.

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Hon Hai has about 800,000 workers. About 400,000 are employed in the southern industrial town of Shenzhen. After a number of worker suicides (13 people have committed or attempted to commit suicide in 2010 so far), the company has announced that it will give 20% raise to its workers. Workers at one plant in Longhua are paid 900 yuan or $132, the legal minimum wage in Guangdong province, though many workers work overtime at 1.5 times the standard rate. The company is secretive about its activities and uses the trade name of Foxconn. It makes personal computers and other products for Apple, HP and other companies. The company uses a military style discipline and it is reported that there is excessive stress in working conditions.

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Hyundai's residual values have increased from 40% a year ago to 43%, according to Automotive Lease Guide, surpassing Detroit automakers and catching up with Toyota and Honda; as a result of improving perception of its quality and value. Hyundai's profit is up, as it is able to charge better prices and cuts back on incentives. The Sonata's new model is selling quickly, and this has required using capacity at a Kia plant in the US to build more of this model. Incentives are down by one third compared with 2009. And Daiwa Capital Markets forecast is for profits to triple by the end of 2010, in only 2 years. Ten new product launches in 2010-2011 will add more traffic to its showrooms.

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Audi is the second largest car company in the premium car category in China after BMW. Audi now plans to make 700,000 cars in China by 2015 instead of 2020 as planned earlier. Audi say executives say the premium car segment in China is growing rapidly in China. It expects sales to grow overall at a a more normal pace than the frenetic pace of recent years. The slower growth in the economy at 7-8%, which is reflected in slower sales in the overall market, is not the case with the premium cars. Because of rapid growth in 4-5 years the Chinese market for premium cars will look more like mature markets in the U.S. and Europe, says Audi sales chief Schwarzenbauer.

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India's prime minister Modi takes the first six months of his administration to come to grips with the problems of a slow moving bureaucracy, inexperience of ministers, problems left behind from the previous Congress party administration. He had raised hopes during the election campaign of faster action, but it now appears that it will take much longer, about 1-2 years for the new administration to make the transition to rapid growth. Analysts say this is also the approach Modi took in Gujarat state where he was chief minister, an approach of carefully studying the problems before formulating a plan of action. To do this Modi is ensuring a level of continuity in the civil service and has reappointed top civil servants such as Mr. Ajit Singh.

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The loss of support of tribes in Anbar province, as Islamic State targets tribal leaders and officials who supported U.S. sponsored Awakening Councils during the presidency of George Bush. Many of the gains of that period are diminished with the lack of trust of Sunni tribal leaders in the Shiite led Iraqi government. For the tribes that are fighting Islamic State the Iraqi government is hesitant to provide support believing the arms will later be used against it. The U.S. government is also hesitant to increase its involvement. The Islamic state has alienated Sunni tribes supporting it because of its violent methods. These tribes support Islamic State because of a lack of alternatives and because of money paid to them by Islamic State.

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People in Poland, Hungary, and other countries in Central Europe took out mortgages in Swiss Francs. The jump in the value of the Franc means their payments go up increasing economic pain in these countries. In Hungary the government of Viktor Orban has converted most franc loans into local currency forint loans at favorable rates and this will now be seen as a remarkably positive move. Poland has a growing economy compared to Hungary with borrowers in francs with higher incomes than Hungary, yet with 37% of the homeowner loans in Swiss Francs political parties are looking for support before elections offering to shift these loans into the local currency. Banks in Poland are well capitalized and are not likely to be seriously affected.

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Changes to Japan's corporate governance code being pushed forward by the Abe administration will give more importance to shareholders interests. This includes improving transparency and management structure, including more independent outside directors on boards, to breakup cozy relationships of executives running corporations in Japan. Improving return on equity is part of the plan proposed by Abe. The government has offered to cut the corporate tax rate down to below 30% in a few years as part of the new deal. Abe told the nation in a televised address that "there are neither taboos or sacred cows, only a singular strong devotion to see this through to the very end." Abe called for more women in the workforce, and the hiring of more foreign workers.

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Economists at Goldman and Citigroup see a loss of another 2 million jobs, with job losses into 2010, for total job losses of about 4 million jobs, even after the jobs saved or created of 2.5 million jobs from the large stimulus of $700 billion that the Obama administration is said to be planning. A lot depends on smart policy from the new Obama administration because it will require enough stimulus and public investment to break the loop of falling unemployment, and at the same time allow private investment and business to get back to work with new investments in plant and equipment without getting bogged down in industrial policy with the government trying to do alot more than it is capable of.

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Representative Thadeus McCotter represents Livonia, an area west of Detroit, that has suffered shuttered auto and auto supplier plants and high unemployment. He gets a lot of questions these days about his vote against the Stmulus Plan. Says the Speaker of the Michigan State House, State Representative Andy Dillon, whose district overlaps McCotter's, "they are betting the farm, if this works, I think people will remember they were not on board. Democrats are targeting McCotter and 11 other Republicans in competitive districts in harder-hit states, saying they opposed the stimulus package's tax cuts, and generation of new jobs or preservation of jobs at the local government level, as well as extended unemployment benefits. Independent polls are reporting wide public support for the stimulus package.

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The Pilbara iron ore region in western Australia in red desert 675 miles north of Perth, is where China gets a lot of its iron ore, mainly from mines run by BHP, Rio Tinto and Fortescue. With the Chinese economy slowing Australia's growth rate dependent on commodities exports like iron ore is declining. Australia's central bank has lowered growth forecasts to 1.5% for 2008-2009, and this is considered optimistic by economists. With prices of iron ore jumping Australia's terms of trade had improved by a leap but now it looks like the terms of trade have peaked. The budget surplus of A$22 will be cut by two thirds by this and also from the A$10.4 stimulus package announced by prime minister Kevin Rudd.

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The Wall Street Journal CEO Council which met in Washington for a 1 day conference provided some idea about what CEO's are thinking. Laurence Meyer a former Federal Reserve governor said he projected a 4% annualized contraction in output in the 4th quarter and a 2% annualized contraction in output in the first quarter of 2009, and the US unemployment rate exceeding 8% by the end of 2009. That does not include impact of alarge stimulus program by the incoming Obama administration. Asked to vote by electronic device only one out of 93 CEO's said it will be 6 months before the economy returns to a normal growth rate, almost 80% were expecting a slow economy through 2009 and 2010.

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Yoshioka will try to revive Sony's TV business and provide the leadership for regaining Sony's market leader role in televisions. Sony will introduce models at the lower price range and will ensure a supply of flatpanels at favorable prices by working with Sharp and Samsung in manufacturing.

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Joseph Stiglitz writes that keeping the dollar as the reserve currency is no longer the option. He tells us that it comes with some hidden costs such as a weaker global economy. Having developing countries keep hundreds of billions of dollars in the US in low interest earning reserves makes no sense considering the needs of developing countries, and the improved prospects for the USA and Europe in exports to a growing developing country economies. He points out that a new global reserve currency, with an orderly transition, may be the most important reform to ensure the longterm health of the world's economy. Its bad for the USA to keep exporting T-bills, says Stiglitz, as it does not create jobs. And its bad for all concerned as it lowers global economic growth. Especially he says when it is so unseemly for developing countries not to use the money to improve living standards in their own countries, with the help of exports from developed countries, that in the end improves global growth and the global future....

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During the early weeks of the Libyan people's struggle the Wall Street Journal was one of the rare voices that stood up for freedom in Libya, saying the U.S. had to have the will and was not so overstretched that it could make a difference working with its allies in NATO. It took some time for the Obama administration to make up its mind by which time the Gaddafi forces would have entered Benghazi. It was the leadership of Sarkozy of France and Cameron of Britain that made the decisive difference at the right time. And as the tide turned it was the young people of Libya who could be seen in the video footage who showed bravery against the organized heavily armed forces of the Gaddafi regime. The lesson from the U.S. support for the Libyan people's movement for democratic government is that the U.S. can make a moral difference and a strategic difference when it follows the right instincts that have guided the country since its founding.

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The Christian Democrats (CDP) under Angela Merkel received only 23% of the vote in the 2011 Berlin elections. The Free Democrat party (FDP) with 2% of the vote did not reach the 5% threshhold for seats in the Berlin legislature. This was the fifth time the FDP failed to win enough votes to get seats in the regional parliaments. This endangers the CDP-FDP coalition. The FDP campaigned against Merkel's policy of financial support for Greece. The Social Democrats support the euro currency union and issuance of euro bonds, which suggests voters are not choosing parties based on opposition to bailouts of troubled European Union countries. The Social Democrats-Green coalition will have a majority in the state legislature, as the Greens won 18% of the vote. The Pirate party of internet free-speech activists and leftist voters dissatisfied with existing parties were expected to win 9% of the vote, which is a first for regional parliaments for a party of this type. Some of this vote could have increased the Greens vote....

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A traffic jam on Highway 110, leading from the border with Inner Mongolia to Beijing for 60 miles, is now passing 10 days, with traffic inching along at 3 miles per hour. With roadwork on a highway from Beijing to Tibet starting August 13, sections of a major road which circles Beijing have been closed. Chinese bought 13.6 million vehicles in 2009, compared to 9.4 million in 2008. China is building roads, but cannot keep up with this surge in automobile use, especially in Beijing. A study by IBM puts China at the top for "commuter pain," the pain suffered by drivers as they stay stuck on roads. In fact China's media reported that average driving speeds for Beijing could go as low as 9 miles per hour, if car sales in Beijing keep growing at the rate of 2000 new cars per day. According to the Beijing Transportation Research Center, Beijing will have 7 million vehicles by 2015. Beijing was once known for bicycles in the Mao era, and this could be the pace that traffic moves says the Center....

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In a forceful speech at George Washington University, on April 14, 2011, President Obama outlined his proposal for addressing the U.S. budget deficit. His plan includes a mix of tax increases and spending cuts. His plan is for a $4 trillion deficit reduction over 12 years, with $1 trillion coming from revenue increases, $2 trillion from spending cuts, and $1 trillion from savings in interest because the U.S. would borrow less. Obama's plan would end the Bush-era tax cuts for people earning more than $250,000 a year and eliminate a number of tax breaks. Spending cuts would include cuts in Medicare costs, discretionary spending, and defense. Obama's plan would commit to automatic, across the board spending cuts and tax increases if an initial target is not reached by 2014. Obama said the Republican plan proposed by Paul Ryan presented " a vision that was less about reducing the deficit than it is about changing the basic social compact in America....The's nothing courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill."...

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Francesca Doner's interview with Jean-Marc Duvoisin, CEO of Nestle Nespresso SA. Duvoisin was CEO of Nestle SA in Mexico before becoming chief of Human Resources for Nestle. He now heads Nespresso. Here he responds to questions about the competition from other companies such as Swiss supermarket Migros, which makes the coffee pods for Nespresso machines. Duvoisin says the competition is not affecting Nespresso sales and he sees the consumer insights from selling direct to the consumer as invaluable to Nestle. Nespresso's next challenge is markets in the U.S., China and emerging markets. He sees the shift from tea to coffee in China as a very gradual one. Nestle's focus is on making the coffee experience good for consumers so that they stay with Nestle for a long time. Strategy in the U.S. will focus on the long cup of coffee with milk and not on the espresso. This he sees as a more feminine experience, more relaxed and smoother. TV spots in the U.S. feature actress Penelope Cruz.